The West Australian government has announced the establishment of a program that provides interest-free loans to help struggling builders complete unfinished properties, as reported in an article by Yahoo!news.
The $10 million Builders’ Support Facility program will be providing interest-free loans of up to $300,000 for builders who have houses that have been under construction for more than two years.
“There are hundreds of homes that are out there that are not being completed by builders leaving families stranded,” said WA Treasurer Rita Saffioti.
“Homeowners who are left in limbo living with family members (or) continuing to rent when they've got a property that they'd like to move into.”
Saffioti stated that the construction industry has been experiencing increases in prices for skilled labour and building materials in the past few years, which has been pushing up costs and delaying construction.
This has also led to home buyers being unable to access their mortgages to make progress payments to their builders because milestones were still unachieved, resulting in cash-flow issues for builders and delayed construction of up to 600 homes without a timeline for completion.
To help in solving the problem, the loan facility will be providing a maximum of $300,000 to eligible builders with up to $60,000 per property provided in instalments. An independent property adviser will be overseeing the progress of projects and builders, who will be receiving taxpayer funds to have projects finished in a span of eight months.
Michael McGowan, executive director at the Housing Industry Association WA, said that the failed construction businesses negatively impacted the building industry and the community.
“The builder and their family lose everything, trades and suppliers suffer losses, with consumers having to wait to restart the home-building process,” McGowan said.
“The Builders' Support Facility will hopefully minimise the number of people that have to go through this process.”
However, Steve Martin, the opposition housing spokesman, had said that the implementation of the loan scheme was too late to do anything for people with unfinished homes.
“This will do nothing for the hundreds of people who have half-built homes because their builder has already gone broke,” he said.
